News from the Hill…
The second week will be complete by the time you read this. It seems to take week three before I can get into the different routine and feel like I can work on several different tasks at the same time. So I am always glad to get the first two weeks behind me. None the less, bills are being filed, meetings are being held and the legislative work is beginning. There have been lots of different presentations in the different committees to educate new legislators and to help remind those who have been there awhile. This week in the Commerce Committee the Insurance Commissioner gave an update on the Insurance Division. There has been one newer health insurance company that is in financial trouble. They grew the company too fast, didn’t have enough equity and underpriced their product. That would be a perfect recipe for failure.
Ways and Means Committee…
I assigned three bills in the Ways and Means Committee this week. One of the bills is known as the coupling bill. Iowa has to decide whether or not to “couple “with the Federal government on it’s tax policy. This bill is HSB 67. I hope to move this bill fairly quickly as we are in the tax preparation period. Taxpayers and tax preparers deserve need to know what the state plans to do. The dysfunctional Federal government affects states and taxpayers in many ways. The Federal Governments lack of being able to decide tax policy until the last two weeks of the year is a terrible way to establish tax policy. So now we are forced to decide tax policy on a year that is already over. If the bill moves as written it will lower the revenue in fiscal year 2015 approximately 99 million dollars. However it would increase revenue for following fiscal years. One of the other bills is HSB 63 which deals with Iowa educational savings plan trust also known as the Iowa college savings 529 plan. The bill would allow a participant who makes a contribution to the trust on or before the Iowa income tax return filing deadline to elect to have that contribution treated as though it was made on the last day of the preceding calendar year. This would be very similar to contributions to IRA’s under present law. This bill would be a planning tool for participants of the plans and help people plan for the recipient’s college in the future. The third bill assigned in committee was HSB 64 which exempts the sales tax from the use of self-pay washers and dryers. This is a bill that we passed a couple of years ago but never was passed by the senate. So once again, we will attempt to get the bill to the Governor’s desk for his consideration. The committee will have two meetings next week and I have two more presentations scheduled for those meetings. I hope to have a bill or two ready for passing also.
Budget Presentation…
This week in the Ways and Means Committee the Legislative Service Agency Fiscal Services Division gave a presentation on the General Fund Budget overview. When we look at revenue sources for the state government, tax payers fund the government with approximately half of the revenue coming from personal individual income tax returns and approximately one-third coming from sales tax receipts. Those two categories alone bring in over $5.3 billion annually. The total net revenue receipts for budget year 2016 are projected to be $6.489 billion. On the expenditure side, School Aid and Medicaid are the two biggest appropriations that make up approximately 60 percent of the total expenditures. Approximately 80 percent of the general fund budget is spent on Education and Health/Human Services. Since 2005 school aid has increased 4.2 percent annually or 834 million dollars and Medicaid has increased 11.7 percent annually or 721 million dollars. When you have the two biggest areas of the budget growing that fast and revenues growing at a slower rate spending has to be slowed.
“If we ever forget that we are One Nation Under God, then we will be a nation gone under.” – Ronald Reagan
For more information on these and other bills: www.legis.iowa.gov
Until next time,
Tom Sands